An article on the blog (PTO Today Blog Blog Archive Colorado PTO embezzle _ $15,000) suggests that a "non-signer" open the bank statement each month. In my case, I have a non-signer review the statement, but I like to go ahead and reconcile the account in Quicken before I hand the statement over, since it can take a week or two to connect with the non-signer.

What is the advantage to having the non-signer review it *first*? Is this in case the embezzler forgets to cover his tracks and is reminded by the statement?

Hi gj-

Yes, that's basically it. I've tracked embezzle stories (waaaay too many of them) for 11 years now, and I can't think of a single one that's been a sophisticated conspiracy. 9 times out of 10 it's been the Treasurer writing checks to cash or using parent group checks (or cash withdrawls) to pay for personal items.

If said treasurer opens the checking account, she could very simply remove the 2 or 3 checks which were questionable .... and make things much more tricky to discover.

What I like most about the "someone else opens" rule is that it is an extremely simple deterrent. Audits and committee work, but they're much more involved than the simple envelope rule.

I'd wager that 75% of those embezzles I've tracked wouldn't have happened at all if the envelope rule was in place. The potential embezzler would have known that getting caught was highly likely. And that would be enough.

I use the rule in our business here, and I trust our books people completely. It's just a simple, solid practice.

Tim

Ah -- well, in our case, we don't get the checks back: we get photocopies, eight to a page, so it's not so easy to just take out 2 or 3. If the checks did come back singly, I'd think the person reviewing the statement would still think it odd that check #299 was missing, but the statement showed it had been debited during that month.

in our case we have a statement sent to the school Via fax, one statement to the Treasurer and then online banking. this way the President, secretary and the treasurer all the right to have them.
i hope this helps

We don't even get check images back. We have to go online to view them. The statement is sent to the school and the president opens it, reviews, and initials before the Treasurer takes it for reconciation. Yes, it would be better for a non-signer to open it, but since all you are looking at is a vague list of check numbers and amounts (no check images), it wouldn't mean much to the outsider. I look for any really odd amounts, or a high number of checks in the month, and definately for any withdrawls against the account. It woudl be way better to see check images becuase you can look for altered amounts or forged signatures, but we chose not to pay the extra fee for that service. We have other financial controls in place that help reduce our risk such as 2-signatures, full paper trails for each check, monthly reconciation, monthly treasuers report, etc. Tim makes a great point: the more financial controls follow, the less likely anyone will be tempted to abuse your PTO's funds. My favorite Treasurer mantra: Trust is Not a Safeguard.

I think it's a better idea to not have the treasurer sign the checks. It is a good accounting practice to have the purchasing, signing and record keeping functions separate. This reduces the possiblity of inappropriate use of funds.